TechFlow reports that the North American Securities Administrators Association (NASAA) has backed the U.S. Securities and Exchange Commission (SEC) in its case against Coinbase, arguing in a filing with the U.S. District Court for the Southern District of New York that digital assets should not receive special treatment, and emphasizing that the SEC's position is neither novel nor extraordinary.
In the SEC's lawsuit against Coinbase, NASAA’s General Counsel, Vincente Martinez, stated that explicit congressional authorization is not required for applying securities laws to digital assets, and that the SEC's stance aligns with its long-standing public position. The central issue will revolve around the court's interpretation of the Howey Test, which determines what constitutes an investment contract. While Coinbase argues that digital assets fail this test, Martinez contends that the Howey Test should be flexibly applied to accommodate technological advancements, including securities on blockchain platforms.
Martinez also rejected Coinbase’s assertion that digital assets are a significant part of the U.S. economy, citing limitations in real-world utility and widespread adoption. NASAA supports the SEC’s request that the court deny Coinbase’s motion to dismiss the lawsuit.
